The euro climbed against other currencies Wednesday amid signs that Italy may yield ground over a budget dispute with the European Union. However, the shared currency relinquished some of its ground against the U.S. dollar amid strong data that spotlighted U.S. economic health.

After reaching an intraday high of $1.1596 versus the dollar, the shared currency EURUSD, -0.0261% last traded at $1.1514, lower from $1.1549 in late North American trade on Tuesday.

The eur o rally began late in Asian trade after a report in Italian daily newspaper Corriere della Sera said that Italyâs government planned to trim its budget deficit target over the next three years.

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Italian officials had previously clashed with Brussels over the budget deficit target, which had stoked fears of another crisis in the region and put pressure on Italian stocks and bonds.

However, after some strong U.S. data, the euro reversed course to head back toward Tuesdayâs low. âWe did get a bump from that failed attempt to take out 1.1500 earlier this morning, and prices in the pair even moved back for a retest of prior support,â wrote James Stanley, currency strategist at DailyFX. âBut sellers came back in fairly soon, and prices have pushed right back down towards that 1.1530 prior support.â

The start of the week had been marked by growing tensions between EU and Italian officials, with European Commission President Jean-Claude Juncker warning of a risk of another Greek debt crisis, if Italy didnât dial back its deficit spending plans. Tuesday marked a particularly fraught day for the euro amid budgetary squabbling.

Read: For Italy, the euro is âunrenounc able,â its prime minister reassures

The pullback in the euro has dragged the ICE U.S. Dollar Index DXY, +0.06% DXY, +0.06% into the green, aided by a strong, private-sector ADP employment report and Institute for Supply Managementâs survey.

The index, which measures the U.S. unit against a basket of six major rivals, was last trading at 95.784, up 0.3% si nce late Tuesday and its highest level since Aug. 20.

The British pound GBPUSD, +0.0000% succumbed to the dollars strength, last changing hands at $1.2974 from $1.2980. The sterling had reached an intraday high of 1.3022. U.K. Prime Minister Theresa May delivered a speech at the Conservative conference, calling on the party to unite behind her plan to exit from out of the EU, known as Brexit, according to news reports.

âThere have been no real standout remarks from [May] as far as Brexit is concerned with her stance seemingly little changed despite the recent blows to her proposal,â said David Cheetham, chief market analyst at XTB. âMay warned of the short term damage that a no deal would bring to the U.K. economy before adding that she will not rule this out as it would weaken the countryâs negotiating positionâ"seemingly oblivious that this public admission may well do just that.â

The Canadian dollar USDCAD, +0.0622% known as the loonie, traded lower against the greenback. A single dollar last bough t C$1.2850 versus C$1.2825 late Tuesday.

The Australian dollar AUDUSD, -0.1408% slipped further Wednesday after weaker-than-expected building permits data. The Aussie was last trading at $0.7120, down from $0.7187, representing a 0.9% decline, its lowest level against the dollar since Sept. 18.

Read: Italyâs budget turmoil: Hereâs what it will take to rattle global markets

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